Can I retire with $1.5 million at 65?

Is $1.5 million enough to retire at 65?

Reached $1.5 million retirement Saving is possible. While that’s a lot of money, it’s within reach for most incomes. As long as you start saving early – ideally in your 20s – and take advantage of market returns, you can reach $1.5 million in retirement savings with even modest contributions to your retirement account. The key question is: is that enough? Is $1.5 million enough to retire at 65, or should you plan to accelerate your savings or even delay retirement? Here are five things to keep in mind when asking this question.

A financial advisor can help you determine when you will have enough money to retire. Find an advisor today.

How Much Retirement Income Do You Need?

A $1.5 million nest egg may be more than enough to get you into retirement, but it all depends on how much money you’re willing to spend. The more income you want to replace, the more you need to withdraw from your retirement savings account, and the higher it needs to be.

In general, financial experts recommend budgeting for between 60% and 80% of pre-retirement income. For example, let’s say you make $100,000 a year. To maintain your current standard of living, you should plan a retirement account that can generate income between $60,000 and $80,000 per year for the rest of your life.

This will help you decide how much to hold in your portfolio. Suppose you plan to retire at 65. Let’s also assume that you beat all the odds and live another 40 years. After all, it’s better to overestimate than underestimate when estimating your life expectancy. As a result, you need a portfolio that can generate $80,000 a year for 40 years.

Well, that doesn’t mean you have to have $3.2 million in cash on hand. Your portfolio is not static, it will continue to grow over time. Instead, to live on $80,000 a year in retirement, you need about $1.8 million saved up to the age of 65. From there, growth and social security will fill in the gaps. On the other hand, if you cut that down to $60,000 a year, you would only need $1.08 million in your portfolio.

However, when we ask “will $1.5 million be enough to retire,” the answer is…it depends. Yes, that can be a lot of money for a comfortable retirement, but it all depends on how much you’ll be drawing.

What are your expenses?

When you’re thinking about spending for retirement, it’s important to ask exactly what kind of lifestyle you envision. How will you spend your money? Where will you spend your money? What are your needs and what kind of flexibility do you want? All of this determines how much you need to withdraw each year. Some important aspects to consider are:


Will you Own your home or rent it out It? Tenants must expect these monthly payments indefinitely. Homeowners who have paid off their mortgage don’t have many regular payments, but they do have money to set aside for maintenance and upkeep. After all, you might not need to send the landlord a check, but boiler replacements are still expensive.

travel and entertainment

What kind of luxury would you like to enjoy? Would you like to spend your retirement traveling or do you like going to the cinema on Saturday nights? The more money you want to spend on entertainment, travel, and other luxuries during your retirement, the more money you need to have saved.

Location and Taxes

Where you live matters. Living in a city might give you access to many of the things you love, but it comes with a far higher cost of living. Some states are much more tax friendly than others, but that can keep you from living where you want. Also, be careful when it comes to making tax decisions. When a state claims to have low taxes, it often means it doesn’t have any income tax and accounts for the difference through sales taxes. Depending on how you have structured your portfolio, this can even increase your portfolio cost of living.

Take a look at how you want to balance your lifestyle and costs, and consider if location can help with that.


As retirement approaches, you should take your health more seriously. This is partly because health care is going to be one of your biggest long-term expenses, and if those costs are accelerating early on, it’s best to know now. Make sure you have coverage for specific needs like dental insurance and potential care insuranceand factor this into your budget.

When do you claim Social Security?

Is $1.5 million enough to retire at 65?

Is $1.5 million enough to retire at 65?

You can start taking it Social Security as early as age 62 or as late as age 70, and that choice makes a big difference. Beginning in 2023, if you start collecting Social Security at age 62, you can receive up to $2,572 in monthly benefits for the rest of your retirement. If you wait until age 70, you can get up to $4,555. In the full retirement age (66 or 67 depending on your date of birth) you can get up to $3,627.

It is important to remember that this is not guaranteed. Social security should pay out more money to higher-income households. So the more you’ve earned during your working life, the more money you can get from Social Security in retirement. But the basic structure doesn’t change: the longer you wait, the more money you’ll get from this program.

When you retire at 65 but can wait five more years to withdraw money Social Security, You can almost double your benefits. Calculate your benefits based on your income and retirement age and take this into account in your planning.

Do you have significant assets?

Essentially, one of the most important elements of retirement planning is backup planning.

In other words, what happens if you don’t have enough money in your account? What will you do when you’re celebrating your 90th birthday and your accounts have all started to drop dangerously low?

This is an important question because it tells you how much security you need to build into your retirement account. For households with significant wealth, these can serve as a backup plan. Selling your home or valuable keepsakes can be a bad, if not heartbreaking, option, but it can act as a backbone against poverty in old age.

On the other hand, if you do not have significant assets to fall back on, you should take this into account when planning your retirement. If so, you may want to continue growing your account before retirement.

How is your portfolio growth structured?

Is $1.5 million enough to retire at 65?

Is $1.5 million enough to retire at 65?

Finally, it is important to consider how your portfolio is structured. There are two main aspects to consider when evaluating your portfolio. First, based on your investments, what kind of growth and risk do you expect from your portfolio? This informs your approach because the more growth your portfolio generates, the less capital it will need to retire. But the more risk your portfolio faces, the more cash you should hold or reinvest.

Second, do you plan to live off investment income? capital gain?

Capital gains are the gains made from the sale of an asset such as a stock. Selling assets for capital gains will generate retirement income for you, but it may mean diving into your capital and withdrawing some of your holdings.

On the other hand, some assets automatically generate income or interest payments. For example, bonds pay you an interest rate, income stocks pay dividends, and annuities are contracts that pay a fixed amount each year. The most important thing about these assets is that they are long-lived. You don’t have to sell them to generate this money.

The more money you make from income-generating assets, the less you will deduct from the total equity of your portfolio. Let’s say you manage to build a portfolio that generates $80,000 a year in combined dividend, interest, and annuity payments. In this case, the customer is of secondary importance. Regardless of the amount, this is enough for your pension, since you can live on these assets indefinitely.

It is more difficult to build a strong collection of income wealth. If you can, however, you can fulfill your retirement dream: a self-sustaining portfolio.

bottom line

You can certainly retire comfortably at age 65 with $1.5 million, but your ability to do so will depend on how you plan to live in retirement, how much you plan to spend, when you file Social Security claims want and how your portfolio is structured. Before you make any big decisions, review your financial plan in detail.

Retirement tips

  • Social Security plays an important role in most retirement plans, and having an accurate estimate of how much you’re likely to collect can help you make more informed decisions about your future. SmartAssets Social Security Calculator can help you estimate your future benefits based on your income and when you plan to retire.

  • Good financial advice can make all the difference when it comes to retirement planning, and finding a financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors operating in your area, and you can interview your advisor matches for free to decide which one is right for you. When you are ready to find an advisor who can help you achieve your financial goals, Get started now.

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